BNUMBER: B-261758
DATE: October 26, 1995
TITLE: Moore Medical Corporation
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Matter of:Moore Medical Corporation
File: B-261758
Date: October 26, 1995
Joseph C. Tarantino for the protester.
Joseph K. Wiener, Esq., Piper & Marbury, for General Medical
Corporation; Gene R. Carper for Seneca Medical, Inc., and J. Michael
O'Connor for Colonial Healthcare Supply Co., interested parties.
Barbara J. Stuetzer, Esq., and Phillipa L. Anderson, Esq., Department
of Veterans Affairs, for the agency.
Christina Sklarew, Esq., John Van Schaik, Esq., and Michael R. Golden,
Esq., Office of the General Counsel, GAO, participated in the
preparation of the decision.
DIGEST
Agency's evaluation of proposals for medical/surgical supplies under a
primary distributor program was reasonable where protester's proposal
and references did not demonstrate sufficient breadth, depth, or
relevancy of experience to assure contracting officer that the firm
could successfully perform the contract.
DECISION
Moore Medical Corporation protests the rejection of its proposal by
the Department of Veterans Affairs (VA) under request for proposals
(RFP) No. M3-Q1-95, alleging improprieties in the agency's evaluation
of proposals.
We deny the protest.
The RFP was issued to establish a primary distributor program for
procuring medical/surgical supplies through the award of multiple
distributor agreements for each of 25 geographic cluster groups. The
RFP statement of work explained the agency's intention to convert to
commercially based distribution systems by establishing a multiple
award medical/surgical primary distributor schedule for brand-name
specific and generic medical and surgical supplies. The RFP described
a primary distributor as a business concern that functions as a
purchaser's principal source for a broad product line of medical and
surgical supplies. The VA and other government agencies' medical
facilities would use the distributor agreements to select primary
(and/or secondary) distributors to provide medical/surgical supplies.
The RFP explained that successful offerors were to maintain inventory
for an extensive medical/surgical product line and were to possess the
experience, skills and capability to provide distribution services for
such products along a full continuum of distribution strategies,
including conventional, just-in-time and stockless distribution
strategies.[1] Contractors would enter into customer ordering
contracts for delivery of products under particular distribution
strategies with authorized VA facilities in the geographic cluster for
which the contractor received an award.
The RFP stated that awards would be made on a cluster-by-cluster basis
and that three awards would be made for each geographic cluster. The
RFP also stated:
"It is VA's desire that all three awards include "stockless"
distribution. However, in the event that an acceptable offer is
not received from a small business firm with "stockless"
capability, VA will give consideration to small business firms
who do not have "stockless" capability. To assure product and
distribution service availability through the full continuum of
the three distribution strategies, at a minimum, two of the three
awards shall include "stockless" distribution."
The RFP also stated that awards would be made to the responsible
offerors whose offers conform to the solicitation and which
represented the best overall expected value, price and technical
factors considered. The RFP listed two technical evaluation
factors--technical excellence and socioeconomic consideration--and
stated that they were listed in descending order of importance and
that together, they were more important than price. Technical
excellence included the following four subfactors: product
availability, distribution services, operational capability, and
quality control. Under this factor, the RFP stated that "[t]he
offeror's proposed range and breadth of products and distribution
services (including value-added) together with its supporting
operational expertise and quality assurance programs will be evaluated
to determine the offeror's relative ability to deliver an extensive
medical/surgical product line and to furnish a full continuum of
distribution services in accordance with the Statement of Work."
In addition, the RFP advised that the agency would develop a level of
confidence assessment rating ("LOCAR") for each offeror. This rating
was to reflect the government's degree of confidence that the offeror
would keep the promises it made in its proposal. The rating was to
"be used to adjust the Government's evaluation of the offeror's
proposal, and may be highly influential to the determination of which
offeror represents the best overall expected value." The RFP stated
that in developing the LOCAR for each offeror, the agency would
consider the factors of past performance and financial condition, and
that past performance and experience, or lack thereof, would be the
most important factor in developing the LOCAR. The RFP also stated
that the government would:
"evaluate the offeror's reputation for conforming to
specifications and to standards of good workmanship, for
adherence to contract schedules (including the administrative
aspects of performance), for reasonable and cooperative behavior
and commitment to customer satisfaction, and for having a
business-like concern for the interests of the customer. The
Government will also evaluate the depth, breadth, relevancy, and
currency of the offeror's work experience."
The agency received 79 proposals in response to the RFP, including
proposals from Moore for each of the 25 geographic clusters. Two
technical teams evaluated the initial proposals, while the contracting
officer evaluated the business proposals. The VA conducted
discussions in writing, requesting additional information from Moore
regarding aspects of its technical and business proposals. Regarding
Moore's business proposal, the agency asked Moore to provide discounts
for prompt payment; to clarify whether the firm would accept emergency
orders; to provide the firm's commercial goods return policy; and to
provide additional information regarding past or current contracts.
Regarding Moore's technical proposal, the agency requested that Moore
identify the medical/surgical manufacturers that had been listed with
Moore's pharmaceutical and laboratory manufacturers, and requested
further detail concerning five areas not relevant here. Moore
submitted a revised proposal, and the contracting officer requested
additional information to clarify Moore's responses. The technical
panels evaluated the revised proposals and best and final offers
(BAFO) were requested. Moore submitted a BAFO that included no
additional technical revisions and thus did not require further
technical review.
Moore's technical proposal received the highest score, earning 53.33
points on a
60-point scale. When price proposal scores were calculated, Moore's
proposal also received the highest price scores among the offers
considered for award, receiving from 33 to 36.6 points on a 40-point
scale for each cluster.[2] However, the contracting officer then
concluded that Moore's prices were "out of line with the price
proposal scores of other offerors within the competitive range," since
they were significantly lower. The contracting officer asked Moore to
verify its offered fees, and Moore did so.
Overall scores were calculated for each offeror by adding together the
point scores for the technical and price proposals. The contracting
officer developed a LOCAR for each offer, and multiplied the overall
proposal score by this factor to determine which offers represented
the best expected value to the government. Moore's proposal was
assigned a LOCAR rating of .50. In the report prepared in response to
the protest, the contracting officer states that:
"[a]lthough the technical panel considered Moore's technical
proposal very competitive, the information contained in their
business proposal affected my level of confidence that the
protester would keep the promises it had made in its proposal,
and I assessed that the protester had a 50/50 chance of
fulfilling those promises, and applied a LOCAR factor of .50 to
the proposal scores. I determined that Moore Medical's proposal
did not represent the best overall expected value and that Moore
Medical should not be further considered for award."
Consequently, Moore was notified that it was no longer eligible for
award.
Moore protests that its proposal was improperly evaluated and
unreasonably excluded from the competition. The protester contends
that the agency's stated basis for assessing such a low LOCAR for
Moore's proposal was not reasonable, nor were they raised during
discussions. Thus, Moore argues that the perceived deficiencies in
the proposal either were based on misunderstandings on the evaluators'
part or concerned issues that could have been addressed and remedied
through meaningful discussions.
In considering protests against an agency's evaluation of proposals,
we will not evaluate the proposals anew and make our own
determinations as to their acceptability or relative merits.
SeaSpace, 70 Comp. Gen. 268 (1991), 91-1 CPD 179. Rather, we will
examine the record to determine whether the evaluation was fair and
reasonable and consistent with the evaluation criteria. Id.
At issue here is the LOCAR score that the contracting officer assigned
to Moore. The application of this rating reduced Moore's overall
score by half and effectively excluded Moore from the competition.
The RFP specifically provided that this rating would be used to adjust
the government's evaluation of the offerors' proposals, and could be
highly influential to the determination of which offer represented the
best overall expected value. In other words, offerors were advised
that the LOCAR could directly affect the source selection decision.
Further, the RFP stated that past performance and experience, or the
lack thereof, would be the most important factor in developing the
LOCAR.
After reviewing Moore's business proposal, the contracting officer
concluded that Moore's experience primarily involved the distribution
of pharmaceutical products, rather than medical/surgical supplies. In
addition, she concluded that Moore lacked experience as a prime
vendor. Each "evaluation summary" form that the contracting officer
completed for Moore's proposal for the various clusters has the
following comment:
"A LOCAR of .50 was assessed since information provided by Moore
Medical is representative of pharm. products and not med/surg
products. Current & past experience was supported by its
references to be with pharmaceutical products--thus, offeror
lacks experience relevant to the dist. of med/surg products.
Moore also confirmed in its proposal its lack of experience as a
med/surg prime vendor, a fact confirmed by its references and
demonstrated by its very low dist. fees."
A "Past Performance LOCAR worksheet" for Moore states:
"Offeror's financial condition is good. However, relevancy &
breadth of experience in the medical/surgical area could not be
assessed. Thus, there is a 50% chance of probability this
offeror can perform as a med/surg primary distributor."
The record shows that the contracting officer's primary concern was
Moore's experience, both because she believed it was limited to
pharmaceutical products and because the firm's experience appeared to
be as a distributor rather than a prime vendor (which concern the
contracting officer believed to be further reflected in Moore's low
distribution fees). Although Moore listed experience which included
the distribution of both medical and pharmaceutical supplies, the
references that Moore included for past and current contracts reported
that most or all of the supplies they purchased from Moore were
pharmaceutical.
Moore argues that its technical proposal adequately demonstrates its
medical/surgical product availability and distribution capability and
shows that the firm carries more than 8,000 medical/surgical line
items representing more than 500 vendors. The protester listed 20
categories of products in its product base, and attached lists of its
products and vendors. In its business proposal, Moore described its
approach as utilizing approximately 325 different vendors to supply
more than 8,000 medical/surgical products through its four regional
distribution centers. However, the agency points out that Moore's
technical proposal in fact received a very high score. What lowered
Moore's score was the LOCAR rating, which was based on Moore's
description of its recent and current contracts and on the actual past
experience profile that was developed by contacting the references
Moore had furnished.
While Moore asserts that it is a distribution company, with
significant experience in distributing a vast product line to many
varied customers, and does not distinguish between product groups in
demonstrating its capability to deliver products to its customers, we
think the agency nonetheless could reasonably distinguish between
product lines and modes of distribution in assessing the probability
of successful performance. The contracting officer offers the
following explanation of her conclusion that experience distributing
pharmaceutical products was not relevant here:
"Pharmaceuticals and medical/surgical products are two totally
different industries. Whereas pharmaceutical products have
uniform packaging, are small in size (thus taking little space),
and don't weigh much, medical/surgical products in contrast are
packaged in all kinds of sizes, are bulky (taking warehouse
space), and heavy (i.e. diapers, surgical instruments)."
Regarding the agency's assertion that the protester lacks experience
as a prime vendor, Moore itself concedes that it lacks any specific
experience as a prime vendor under a government contract, asserting
only that the firm "successfully marketed a 'one-stop shopping'
concept to over 1,500 federal government customers, including the
Bureau of Prisons and the Coast Guard," before any federal government
prime vendor program was developed. Moore insists that because its
deliveries under this "de facto prime vendor" strategy were consistent
with the needs of the ordering facilities at that time, it has
demonstrated its ability to meet the agency's requirements here.
However, even that assertion is tempered by Moore's explanation that
its experience differed from the requirements at issue here because it
did not involve the variety of distribution strategies currently
required.
The contracting officer, moreover, argues that Moore's past experience
is not directly applicable, stating that:
"The [Federal Supply Schedule] program is entirely different from
the Medical/Surgical Primary Distributor Program. For example,
under the FSS program, deliveries are on a conventional basis,
and contractors are not required to provide distributor services
along a full continuum of distribution strategies as required by
the Statement of Work of the solicitation. DLA [D]efense
Logistics Agency] [Decentralized Blanket Purchasing Agreement
DBPA] contracts are essentially pricing agreements, i.e.,
agreement is reached with suppliers to have the awarded
medical/surgical distributors distribute suppliers' products at
the agreed upon negotiated product prices with the suppliers.
Distribution of products and related services are provided by the
distributor, not the DBPA supplier."
The contracting officer states that she contacted all five of the
references that Moore provided in its proposal, to assess the firm's
past performance. From these contacts, she concluded that the
majority of products being distributed under those contracts were
pharmaceutical, and were delivered on a conventional basis; these
conclusions, taken together with her conclusion that Moore's prices
reflected a lack of relevant experience, resulted in her LOCAR
assessment. We think the contracting officer's LOCAR assessment was
consistent with the terms of the RFP. Within the discretion that is
afforded contracting officers in assessing risk and applying
evaluation criteria, we think she could reasonably conclude that the
experience demonstrated in Moore's proposal failed to show the depth,
breadth, relevancy, and currency of work experience that would merit a
higher LOCAR.
Finally, we are not persuaded that the discussions with Moore were
inadequate. First, since the assessment of the effect of Moore's
inadequate experience was part of the award decision, rather than the
evaluation process, this was not a weakness or deficiency that
agencies ordinarily would be required to raise during discussions.
Moreover, the agency asserts that "Moore Medical's lack of experience
was perceived by VA to be an inherent weakness in actual experience
which [Moore] could not change and which could not be corrected
through discussions." The prior experience of an offeror is an
aspect of its proposal that is generally not subject to improvement
(although sometimes experience may be appropriately supplemented
through additional personnel, subcontracting, or additional detail
about experience described in a proposal). Consequently, agencies are
not always obligated to discuss weaknesses identified in prior
experience. AWD Technologies, Inc., B-250081.2, B-250081.3, Feb. 1,
1993, 93-1 CPD 83. Here, given the RFP's statement that an
offeror's record of past performance and experience would be the most
important factor in the development of the LOCAR, and the statement
that the LOCAR would be used to adjust the government's evaluation of
proposals, we believe the agency reasonably assumed that the protester
had presented its most relevant prior experience, and that the failure
to provide evidence of work experience of appropriate depth, breadth,
relevancy, and currency demonstrated that the firm lacked such
experience (the contracting officer's own investigation seems to have
reasonably confirmed the lack of certain relevant experience.). We
think the protester was adequately placed on notice by the terms of
the RFP itself that relevant information regarding its past
performance should be included in its proposal, so that the agency was
not required to request additional information during discussions.
The protest is denied.
Comptroller General
of the United States
1. Among other differences, the three distribution strategies involve
different speeds and frequencies of deliveries.
2. The VA has provided evaluation summaries for several of the
clusters for which award has been made. While it is not entirely
clear from the record how the agency arrived at its price scores, it
is clear that Moore's prices were relatively low. Price scores for
the other offerors generally were not higher than 20.